The local arm of international IT management software company CA will be absorbed by business and technology solutions provider EOH.
In a surprise announcement this morning, the companies said they had signed a long-term agreement that makes EOH the only representative of the international business in sub Saharan Africa.
CA employs 50 staff in SA, all of whom are expected to be transferred to EOH, along with whatever infrastructure CA owns. According to the company, the entire management set, including CA country manager Gary Lawrence, will be staying on board and working for EOH.
“Employee salary and benefits will be kept on the same level as they are now and tenure will be honoured,” adds Lawrence.
While it appears as if CA is pulling out the country, Lawrence says: “We fully expect CA's presence in SA to increase as a result of the agreement. We expect to be able to reach more customers, and the partnership intends to hire substantially locally to grow the business.”
Lawrence will not comment on the structure of the deal, or the term of the contract with EOH, saying the details are confidential. However, he adds: “CA is looking to the long term - this is a major step to seize the opportunity and work with a great partner for a very long time.”
The company services “hundreds” of local clients, ranging from large enterprises to government bodies. It also handles the smaller and medium-sized organisations. For the channel space, the company has agreements with “several dozen” partners.
Lawrence is confident customers and partners will not be dramatically affected by the agreement. “We expect customers to be delighted to work with EOH and indeed many of the customers already work with EOH anyway. Customers and partners will continue to benefit from CA's global expertise and best of breed technology. They will also now benefit from EOH's local knowledge and services,” he adds.
CA did not explain exactly what will happen with partners now that EOH has become the sole presence of the company.
According to Lawrence, the company is not making the decision based on the repercussions of the global economic situation. “We are making this decision because this is the right model to significantly accelerate growth in a profitable manner.”
He says the partnership with EOH is an opportunity to grow reach and presence in Africa. “CA already has a very successful business in SA.”
The company says the deal is a uniquely South African venture and has not been concluded in other emerging markets. Its North and French-speaking African market is currently being served by its offices in Dubai.
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